Traditionally, a person in need of a loan, such as a mortgage, goes to a lending institution, such as a local bank. The individual then meets with a lending officer who gives an introduction of the loans that are offered by that particular bank. The prospective borrower will be asked about the amount of the loan he desires, as well as certain preliminary financial information (e.g., gross household income). If the lending officer is satisfied with the borrower's answers, he will ask the borrower to formally fill out a loan application and submit the completed application (along with the application fee) to the bank.
The loan application submitted by the prospective borrower will normally be reviewed by the underwriting department of the bank, which qualifies the borrower for the loan. The information contained in the loan application is first checked to see if it is accurate. If the requested loan is a mortgage, a local real property appraiser will be hired to inspect and appraise the property that is to be mortgaged. Additionally, credit reports are ordered and the borrower's FICO score is obtained from the Fair Isaac Corporation. The underwriting department will then decide, in accordance with lending guidelines of the bank or of a mortgage organization, whether or not the prospective borrower is qualified for the loan.
A loan is granted to the prospective borrower if the bank determines, in accordance with the above-described procedure, that the borrower is qualified. Otherwise, the prospective borrower is denied the loan. Many individuals that are denied a loan based on these traditional criteria, however, remain substantially “good” risks, and are often left without the means to secure the desired loan, or are left with the option of securing a loan at an essentially usurious rate.
In the prior art, there also exist a number of different web-based auction systems, even systems associated with loan processing. One exemplary arrangement, disclosed in U.S. Pat. No. 5,966,699, entitled “System and Method for Conducting Loan Auction over Computer Network” and issued to R. Zandi on Oct. 12, 1999, is related to a computer system that allows for Internet-based loan processing, where the electronic loan application is available for viewing by a number of registered lending institutions, allowing for the borrower to “shop” his loan application to a wider audience than merely his local bank(s). U.S. Pat. No. 6,920,434 discloses an arrangement where a pre-established network of “members” may borrow/loan funds between themselves, using the Internet as the vehicle for publicizing the various loan opportunities among the group members. US Patent Application No. 2002/0038285 is directed to the provision of an electronic “loan marketplace” over the Internet, where this particular disclosure is particularly concerned with providing, processing and “closing” educational loan applications.
While various aspects of these prior art, Internet-based loan arrangements represent advancements over the traditional methods of obtaining loans, there is no mechanism in place that allows for individual borrowers and individual lenders to communicate with each other in a matter that allows for individual lenders to participate in the loan process.